When you are a new trader the things that are emotionally comfortable to do and feel good are almost always the wrong thing to do. Trading is a counter intuitive endeavor and that is why 90% do not make money trading,
“Part of the “If it feels good, don’t do it” rule of trading. When in a drawdown, feels good to double position size, speed up the trading, etc., —– do the opposite, half the size & slow down the trading.” – Richard Weissman
- When it is finally comfortable to buy into a trend it is usually too late, the point of the initial break out where there is uncertainty and discomfort is the place to enter.
- It feels clever to buy more and average down in a losing trade, leveraging a losing trade and fighting a trend almost always ends badly.
- Buying price strength and selling short price weakness is hard for most new traders but the majority of the money is made in the markets by simply going with the flow.
- New traders feel comfortable trying to call tops and bottoms but few can make money doing that, bull markets have no long term resistance and bear markets have no long term supports.
- When a new trader feels very confident in a trade they feel comfortable trading too big on it, but they have to continue to manage their risk even though it is uncomfortable.
- It feels good to just follow a newsletters recommendation and not learn to trade for yourself, you have to learn position sizing, about the risk of ruin, and how to manage your emotions or no type of trading will work.
- It feels good to trade your personal opinions, trade the actual price action no matter what you think will happen.
- It feels good to search for the Holy Grail of trading, the can’t miss system that always wins, give up on that and just find a robust system that fits your personality.
- Many new traders just feel comfortable listening to tips, tips are for waiters, trading plans are for traders.